Gulf bourses mixed on weak earnings, US rate cut uncertainty

By Ateeq Shariff

Stock markets in the Gulf ended mixed on Monday, driven by underwhelming corporate earnings and diminished expectations for further Federal Reserve rate cuts in December.

The U.S. Fed cut interest rates by 25 basis points for the second time this year on October 29, but Chair Jerome Powell's hawkish comments afterward cast doubt on the likelihood of further rate cuts in 2025.

Traders now assign a 71% probability to a rate cut in December, down from more than 90% earlier, according to CME's FedWatch Tool.

U.S. monetary policy shifts have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

Saudi Arabia's benchmark index TASI fell 0.5%, hit by a 4.8% slide in renewable energy utility firm ACWA Power Company 2082, as the company failed to meet quarterly profit forecasts.

Among other decliners, petrochemical maker Saudi Basic Industries Corp (SABIC) 2010 retreated 1.8%, on course to extend losses, a day after reporting a steep fall in third-quarter profit.

The market could remain under pressure as investors take into account the potential for slower market reforms on foreign ownership, said Joseph Dahrieh, managing principal at Tickmill.

"Additionally, low oil prices could remain a source of risk for the market, although it could stabilize after OPEC's decision to halt production increases in the first-quarter next year."

However, Arabian Drilling 2381 advanced 2.2%, despite turning to losses in third-quarter.

Dubai's main share index DFMGI dropped 0.7%, with blue-chip developer Emaar Properties EMAAR losing 1.8%.

In Abu Dhabi, the index FADGI closed 0.8% lower, pressured by a 3.3% drop in Aldar Properties ALDAR.

In the previous session, Aldar tumbled 3.8% after a media report indicated that Alpha Dhabi ALPHADHABI intends to divest a portion of its stake in the developer.

The Qatari index GNRI reversed early losses to conclude 0.9% higher, with Qatar Islamic Bank QIBK climbing 2.4%.

Outside the Gulf, Egypt's blue-chip index EGX30 advanced 1.4%, hitting its highest, led by a 1.9% rise in Commercial International Bank COMI, while Talaat Moustafa Group Holding TMGH jumped 4.8%, after its unit launched the development of a new integrated tourism project with an anticipated investment of $788 million.